5500 Review Requirement Calls from Wharton Group

[Francis]

Two 401k sponsors have received calls from the Wharton Group about a new DOL requirement for a third party 5500 review, which they are offering to provide. Is this a scam or has DOL implemented a new rule to require a third party to review 5500s? Employers in question have 25 or so participants.

[duckthing]

We had a sponsor receive one of these calls a few months back, and the caller was kind enough to leave a voicemail which the sponsor forwarded to us. I don't know if I'd use the word "scam" since I'm sure they're providing a real service (albeit one of questionable value) but it definitely feels like a sleazy pitch. They're intentionally being vague about what fiduciaries are required to do with respect to reviewing their plan, and suggesting that their service would meet these requirements if performed regularly -- the caller in our case stated that this review is required to be performed every 6-12 months for all plans.

I'm not familiar with the group and for all I know they do great work. But the message we heard didn't make a good impression on the sponsor or on us.

[RatherBeGolfing]

They sell "401(k) leads" to financial advisors.  They collect the data, package it in a report, and sell it as a lead.  Im sure they do some sort of review so they can say they provided a service, but their game is selling access to the plan.   

 

[Larry Starr]

4 hours ago, frank1971 said:

Two 401k sponsors have received calls from the Wharton Group about a new DOL requirement for a third party 5500 review, which they are offering to provide. Is this a scam or has DOL implemented a new rule to require a third party to review 5500s? Employers in question have 25 or so participants.

Scam is a perfect definition. There is NO SUCH DOL REQUIREMENT.  We have had clients get calls from them; our clients are educated to know these kind of calls need to be reviewed with us.  This group calls to "disturb" the client, to get the meeting, to convince them they are doing wrong things, and ultimately to get the assets under the control of the person who is buying the leads.  

[Bob the Swimmer]

Larry is absolutely right--in my opinion, DOL professionals understand that the regular audit is expensive for many small- to medium-sized businesses and would never impose such a requirement although their data show that firms that don't do very many audits tend to not do a very professional job at this.

[BG5150]

These kind of things pop up from time to time.

 

Once in a while somebody will do a review of 5500s with zero or inadequate bonds and start scaring people with unsolicited calls that their plan is out of compliance.

 

Or they look for the late deferrals item.  Same schtick.

[RatherBeGolfing]

10 minutes ago, BG5150 said:

These kind of things pop up from time to time.

 

Once in a while somebody will do a review of 5500s with zero or inadequate bonds and start scaring people with unsolicited calls that their plan is out of compliance.

 

Or they look for the late deferrals item.  Same schtick.

My favorite was a recent advisor who had purchased one of these leads with "red flag conversation starters".  He contacted a client and told them they were out of 404(c) compliance and were facing fiduciary liability because the plan had not designated  any QDIAs.  For a vanilla profit sharing plan.

[Gordon]

The Warton Group offers plan sponsor companies the opportunity to have their retirement plans reviewed by a financial advisor from our network. Scheduling agents are using a script to explain what is being offered and all calls are recorded. When a plan sponsor company accepts an appointment a supervisor listens to that call to insure it was correctly explained. Additionally they are specifically told that the review of their plan is not mandatory. I have been doing this type of work for almost 15 years and I have of course had to deal with an occasional complaint that an agent was too pushy or implied that there was a legal requirement that sponsors have their plan reviewed. We set up well over a thousand of these appointments every year. By and far, when a recording is reviewed after a complaint, it turns out to be a misunderstanding. We have always striven to be helpful to sponsors and to help financial advisors grow their practices. Anyone who works with more than a few retirement plans knows that occasionally taking a plan to market uncovers all sorts of issues that would otherwise go unaddressed. Sometimes a review/benchmarking can uncover similar problems. If a plan sponsor or their advisor feels they were misinformed by one of our scheduling agents, we would welcome a call from them. We will investigate any complaint about the conduct of one of our employees. If you are a financial advisor who works with plans, give us a call. We will be happy to explain in more detail what we do and even offer some examples of our work. If we have contacted one of your clients and offered them a review, I'm sure that is disconcerting. Ideally though, if plans are well managed and serviced well, no one should be put off by it too much. No?

[Mike Preston]

There is something particularly seedy about a name that is a homonym for a prestigious institution of higher learning. As evidence look how the op named this thread.